Provincial government announces BC Hydro review

According to an information bulletin issued by the Ministry of Energy, Mines and Petroleum Resources, the Government of British Columbia has launched what it is calling a “ comprehensive, two-phased review” of BC Hydro.

The BC Hydro and Power Authority is a Canadian electric utility company that is the primary electricity distribution corporation province wide. As a provincial crown corporation, the organization is obligated to report directly to the British Columbia Ministry of Energy, Mines and Petroleum Resources, while being regulated by British Columbia Utilities Commission (BCUC).

Per information found in the information bulletin, the provincial government is conducting the review to contain rate increases and control costs, all for the goal of positioning BC Hydro for future success.

During the first phase of the review, the government will be working directly with BC Hydro to identify cost savings, efficiencies and new and improved revenue streams, among other changes.

This is to ultimately keep electricity rates low and predictable over the long-term, while also ensuring that the Crown utility has the allotted resources it needs to continue to provide clean, safe and reliable electricity to the residents of B.C., per the information bulletin.

An advisory group, which consists of staff from the Ministry of Energy, Mines and Petroleum Resources, the Ministry of Finance and BC Hydro, will be undertaking this first phase of the review.

The Government of British Columbia will be expecting recommendations from the first phase of the review over the course of the summer to inform a refreshed rates plan and assist BC Hydro in preparing its next rates application, which will eventually be filed with the BCUC in February 2019.

Per the information bulletin, a report on the first phase of the review and the government’s response will be released in the fall, later this year.

In the second phase of the review — which is scheduled to start in late 2018 — the Province will establish an expert panel. Their job will to be to provide recommendations to ensure BC Hydro is well positioned to maximize opportunities that present themselves due to shifts taking place in the global and regional energy sectors, as well as technological change and climate action.

The second phase of the review is to be informed by new government strategies, which include an energy road map for the future of British Columbia energy and a new climate action strategy, per the information bulletin.

Additionally, terms of reference for this second phase, including the makeup of the yet to be determined expert panel, will be finalized after the first phase of the review has been completed.

At this time, it is anticipated that the panel will deliver its recommendations to government by either the summer or fall of next year.

On March 1, 2018, the BCUC had rejected BC Hydro’s request for a rate freeze, that would have been effective on April 1, 2018. Instead, the BCUC approved a rate increase of 3 per cent, noting that even with the rate increase, BC Hydro will not be able to fully recover its revenue requirements during that fiscal year.

That information is coupled with the fact that BC Hydro rates have gone up by 25 per cent since 2013, while the have skyrocketed by more than 70% since 2001.

To combat these astronomical rate increases and lover electricity costs for B.C. businesses and industries, the B.C. government is currently phasing out the provincial sales tax (PST) on electricity.

Following the 50 per cent reduction that began on Jan. 1, 2018, the government will eliminate the PST on non-residential electricity entirely on April 1 of next year. Residential use of electricity is already PST-exempt.

Finally, the government states that nullifying the PST on electricity will translate into savings of more than $150 million annually for businesses across the province.